What is the dependency related to changing the ownership structure of a Checkers franchise?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- 8.02 Disclosure of Ownership Interests. You and all of your Owners represent, warrant and agree that Exhibit A is current, complete and accurate as of the Effective Date. You agree to promptly notify us of any proposed or intended change to your ownership structure during the Term, to obtain our approval in accordance with the transfer conditions of Section 13.02 below before initiating any such change, and to sign a then-updated and accurate form of Exhibit A (which will replace its predecessor version of Exhibit A) if we approve the change. Each person who is or becomes an Owner must execute an agreement in form and substance as we then prescribe, undertaking to be bound jointly and severally by this Agreement. Each Owner must be an individual acting in his individual capacity, unless we waive this requirement.
- 8.03 Operating Partner. If you are, or at any time become, a business corporation, partnership, limited liability company or other legal entity, you must designate in Exhibit A as the "Operating Partner" an individual we approve who must: (a) own and control, or have the right to own and control (subject to conditions reasonably acceptable to us) not less than ten percent (10%) of your equity and voting rights; (b) have the authority to make, and bind you and all your Owners to, all operational decisions regarding the Franchised Restaurant; and (c) complete our training program to our satisfaction before engaging in his or her operational duties. You may not change the Operating Partner without our prior written consent.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, franchisees must notify Checkers of any proposed changes to their ownership structure during the term of the agreement. Before initiating any such change, the franchisee must obtain approval from Checkers in accordance with the transfer conditions outlined in Section 13.02 of the franchise agreement.
Upon approval from Checkers, the franchisee must sign an updated and accurate version of Exhibit A, which will replace the previous version. Additionally, any person who becomes an owner must execute an agreement, in a form and substance prescribed by Checkers, to be bound jointly and severally by the franchise agreement. Unless Checkers waives the requirement, each owner must be an individual acting in their individual capacity.
If the franchisee is a business entity, such as a corporation, partnership, or limited liability company, they must designate an approved "Operating Partner" in Exhibit A. This Operating Partner must own and control at least 10% of the franchisee's equity and voting rights, have the authority to make operational decisions, and complete Checkers' training program. The franchisee cannot change the Operating Partner without Checkers' prior written consent. These stipulations ensure Checkers maintains control over who is involved in the franchise and that they are properly trained and committed to the business.